President Donald Trump's supporters and voters can't afford to support his products or his properties and now that's being passed along to his daughter Ivanka. So, she's taking the brand to the discount stores.
According to a new Bloomberg report, Ms. Trump sought out a sophisticated, upper middle-class market to target her fashion line, but they're not buying, so now she's being forced to turn to a discount market.
A T.J. Maxx near the New York’s Queensboro bridge offers the Ivanka Trump brand for every discount shopper in the neighborhood but it isn't a place that screams sophisticated luxury. Not exactly the marketing Trump was shooting for.
In her 2009 book, Trump wrote that she hoped to sell “heirloom chic” jewelry, a "cleaned up" version of Hollywood-style glamor. She wouldn't use the Tiffany's tactic, however, of getting lower income shoppers hooked with $100 items before leading them up the pricey diamond path.
“We wanted to offer luxurious pieces in the five-, and six-, and even seven-figure range, but at the same time we wanted to offer entry-level pieces priced between $500 and $1000,” wrote Trump. “We wanted to fill that void just below the high-end diamond jewelers such as Harry Winston, Bulgari, Graff, Van Cleef & Arpels–the boutiques that exemplified acquisitions of $50,000 or more—while at the same time creating luxurious pieces that would be the envy of any jeweler.”
When she started this line, the business mogul looked to brands like Tiffany & Co. and Christian Louboutin for notable marketing. Her line appears next to couture names like Harry Winston and in pricey shops on Madison Avenue. But the Trump name has slipped from luxury boutiques to discount. Among racks of damaged jackets and unsellable slacks sits Ivanka's celebrity brand. However, opening up her line to the masses has saved the company from bankruptcy.
“Celebrities, as a branding tool, appeal more to the mass than luxury,” said founder BrandSimple Allen Adamson. “The further downmarket she goes, the more horsepower her brand potentially has.”
The trend downmarket began in 2010 when she began a footwear and clothing line with lower prices. Four-digit pricetags weren't working for a broad market. Her father's candidacy and win in November accelerated the shift downward in wake of boycotts and scandals. Plans for the release of the Ivanka Trump Fine Jewelry Collection were killed because a $10,000 necklace didn't seem "on brand" for a line that boasts discount shoes. Instead, a "fashion jewelry" collection was launched without the solid gold and diamonds. Some pieces sell for only $11.
It isn't the only low-cost product. Bloomberg compared pricing data for shoes, bags and dresses for Trump and other brands. It's managed to hold it's own among working women brands like Banana Republic and Ann Taylor.
“I wanted the price points to be accessible,” Trump said six years ago, “but ultimately we’re in the business of luxury, and these looks are consistent with that larger messaging.”
By 2011 her brand boomed and her line grew to $100 million business among critical demographics like 25 to 40 year-olds with an average income of $60,000 to $100,000. But over time, that demographic stopped buying. Trump tried to spread the brand abroad, specifically in China, because their culture is “very simpatico with how our brand is positioned," she said.
That didn't work either. The Mandarin edition of Vogue reported each of Trump's boutiques would only haul in $3 million with only five percent growth over the first year. They quietly closed their doors in 2016. Things got worse when every department store but one canceled Ivanka's brand.
The most expensive pieces of Ivanka Trump jewelry still available are a pair of gold-plated necklaces for $148.
Brand operations officer Abigail Klem took over as the Trump family headed for the White House. She wants to see the Trump brand continue to target Trump voters and not Trump donors.
But her biggest challenge is in managing to target shoppers unwilling to support anything with the Trump label. Bloomberg cites the research firm YouGov BrandIndex, who found conservative shoppers have a better impression of the brand than liberals who view it negatively. Two high-end clients, Nordstrom and Neiman Marcus dropped Trump products.
While the sales were lower in 2016 than massive bump they saw in 2015 it was still a bump that scored a little under $30 million for the company. The future of the brand now depends on the downmarket strategy targeting Trump-style supporters. But it's her father's presidency that might still have the largest impact on the name.